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Human vs. machine: The impact of information processing on trading in OTC markets

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  • Box, Travis
  • Davis, Ryan

Abstract

This paper investigates the differential impact of human versus machine SEC filing downloads on trading activity in the OTC market. Human downloads drive immediate, significant increases in trading volume, especially for filings requiring qualitative interpretation, whereas machine downloads produce delayed and muted effects, mainly impacting standardized filings. These findings underscore the essential role of human interpretation in market responses and highlight the distinct effects of access modes on trading dynamics as OTC markets adapt to technological and regulatory shifts.

Suggested Citation

  • Box, Travis & Davis, Ryan, 2025. "Human vs. machine: The impact of information processing on trading in OTC markets," Finance Research Letters, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324015459
    DOI: 10.1016/j.frl.2024.106516
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    References listed on IDEAS

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    More about this item

    Keywords

    SEC filings; Over-the-counter (OTC) securities; Public information; Automated trading; Information asymmetry;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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